Channelnomics

Huawei Symantec Quietly Shuts Down U.S. Ops

Huawei Symantec is essentially no more. The security and storage hardware company quietly ramped down its U.S. operations last week in an effort to clear any potential regulatory obstacles in its sale to China-based Huawei Technologies.

>> UPDATE: Symantec Backup Hardware Business Unaffected by Huawei Symantec Shutdown

In a Jan. 25 letter to partners and customers,  General Manager Jane Li said Huawei Symantec would cease U.S. operations in March when the deal to sell the company wholly to Huawei Technologies is expected to close. The company is continuing to support U.S. partners and customers through Huawei Symantec Hong Kong, a wholly owned subsidiary of Huawei.

According to Channelnomics sources, the company laid off 30 to 60 employees in its California headquarters and across the United States on Tuesday, Jan. 24. The layoffs and intent to shut down came as a surprise to many, since it was expected that the company would simply merge with its parent.

News of the shutdown has been so quiet that U.S. partners say many solution providers who have been doing business with the company don’t know of the shift to Hong Kong support or the eventual closing.

Huawei Symantec’s U.S. office did not respond to inquiries. When contacted by Channelnomics, Li declined to comment and referred inquiries to Huawei corporate public relations.

In a statement to Channelnomics, Huawei spokesperson William Plummer said, “Given that Huawei’s purchase of the Symantec stake in Huawei Symantec has not closed, we’re not in a position at this time to discuss the future structure of the company.  Whatever the case, we remain fully committed to this business and to investing further to enable it to achieve its full potential.”

Sources tell Channelnomics the Huawei Symantec assets and business are a potential deal breaker in Huawei bid to acquire full control of the company it founded with Symantec nearly five years ago. Insiders say the decision to shut down is probably to appease U.S. regulators from blocking the sale.

When news broke last November that Symantec was selling its stake in the joint venture to Huawei, many Huawei Symantec U.S. employees and partners assumed the company would simply be subsumed by its corporate parent.

Huawei isn’t the most liked corporation in Washington. The company is frequently cited as a security risk because its products are designed and manufactured in China. The company has had several potential U.S. acquisitions blocked and last year was forced to sell its stake in 3Leaf after federal regulators raised national security questions. Its 2008 bid to buy 3Com for $2.2 billion was blocked for the same reason; 3Com was bought by Hewlett-Packard in 2010 for $1.8 billion.

The shutdown only effects Huawei Symantec’s U.S. operations. Other offices around the world are unaffected.

Huawei Symantec’s shutdown is the anti-climax to what was otherwise shaping up to be a tremendous year. Just one year ago, the company started getting increasingly aggressive in the channel, signing distribution partners and recruiting resellers. It formally launched its Wingman channel program and held its first partner event in California. There were even rumors that Symantec would exercise its option to take control of the joint venture to give it more hardware products.

In its letter to partners, Huawei Symantec said it would continue to provide support to partners and customers, and honor all warranties.

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